Despite profits being better than expected for the first quarter of this year at 6.9%, insurance firms in the Philippines were unable to capitalize on robust consumption, as sales and profits were down compared to the same period last year.
According to the Insurance Commission, the industry’s total premiums for 1Q 2016 declined by 15.2% to US$1.01bn from US$1.19bn from 1Q 2015. The life insurance sector had the largest drop at 19.7%. The non-life sector, on the other hand, was a bright spot which grew by 11.3% to US$19m.
According to an industry executive, it could be that consumers and investors were wary and in a wait-and-see mood as the general elections in May approached.
The lower sales naturally led to lower profits, with the total net income going down by 3.7% to a little over US$106m for the first three months of the year. Liabilities for the first quarter had a slower year-on-year climb at 8.3%
According to Insurance Commissioner Emmanuel Dooc, insurance premium production could reach US$6.4bn for the year, which could be the highest year on record.
By the end of 2015, around 38 million of the roughly 100 million Filipinos had some form of insurance, although around 29 million of those were covered by cheap insurance products. The Philippines is seen as a microinsurance model in the Southeast Asian region.
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